What are the requirements for transferring an Apricot Lane franchise to an entity wholly-owned by the same individual(s) approved as the franchisee?

According to Apricot Lane's 2025 Franchise Disclosure Document, a franchisee can transfer ownership to an entity wholly-owned by the same individual(s) who were initially approved as the franchisee under specific conditions. This is a notable allowance, as franchise agreements often heavily restrict transfers to maintain brand consistency and control.

For Apricot Lane, the owners of the new entity must guarantee and agree to be bound by the existing Franchise Agreement. This means they assume all responsibilities and obligations outlined in the original agreement. Additionally, the entity itself cannot be engaged in any other business besides operating the Apricot Lane franchise. The franchisee must also provide specified information about the entity and its ownership structure to Apricot Lane for their records and approval.

Furthermore, the ownership in the entity is subject to the same transfer restrictions that apply to the franchisee. This ensures that any future changes in ownership of the entity must also comply with Apricot Lane's transfer policies. Finally, Apricot Lane requires a restrictive stock legend, which is a notice placed on the stock certificates of the entity to indicate that the shares are subject to certain transfer restrictions. This is a common legal mechanism used to enforce transfer limitations and ensure compliance with the franchise agreement.

These conditions ensure that while a transfer to a wholly-owned entity is permitted, Apricot Lane retains control over who ultimately operates the franchise and that the core obligations of the franchise agreement are upheld. A prospective franchisee should carefully review Section 20.B in the Franchise Agreement to fully understand these requirements and restrictions before considering such a transfer.